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Why is the economy better when Democrats are in the presidency?

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History reveals that the economy grows significantly more when Democrats are in The White House than when not. (See the picture from the Washington Post.)

Brad Plumer does a great job explaining the situation in his article with the url and snippet posted here.

He identified certain variables that affect economic performance:

  1. Oil prices
  2. Productivity performance
  3. Consumer confidence

He said that Republicans fall to bad luck on oil prices. Perhaps they could change their luck by embracing renewable energy and becoming energy independent. That was Obama’s idea, but it hasn’t gotten traction.

Consumer confidence gets a boost when Democrats are in office because the majority of the people sense that Democrats are more inclined to champion the Middle Class and poor who represent most of the Americans.

Productivity performance is a function of both policy and industry. So, that one is hard to figure. As the story goes, these three factors don’t explain it all.

Foreign policy that we cannot afford often contributes to increased spending and increased deficit. Republicans have done that most recently.

Revenue shortfalls come from failing to tax those who have the means when the nation needs the revenue. That problem is exacerbated by Republicans whose policies failed to deliver as promised.

“The U.S. economy does better under Democratic presidents — is it just luck?

Posted by Brad Plumer on December 2, 2013 at 9:45 am

Since World War II, there's been a strikingly consistent pattern in American politics: The economy does much better when a Democrat is in the White House.

More specifically, since 1947, the U.S. economy has grown at an average real rate of 4.35 percent under Democratic presidents and just 2.54 percent under Republicans:

(Note: Truman's growth rate drops to 5 percent if you include his unelected term from 1947-1949.)

Why the big gap? One possible explanation is that Democratic policies are better for economic growth. Another is that Republican policies are better for growth — but there's a time lag, so Democrats tend to benefit.

Alternatively, perhaps Democrats simply have better economic luck. That third theory is one favored by economists Alan Blinder and Mark Watson in their new working paper, “Presidents and the Economy: A Forensic Investigation”. They argue that random economic fluctuations best explain the differences in growth between 1947 and 2013, and not which party happens to hold the White House.”

Read the rest here:



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